Financial inclusion in Nigeria: determinants, challenges and achievements

Ozili, Peterson K (2020): Financial inclusion in Nigeria: determinants, challenges and achievements.

Abstract

This article analyse several indicators of financial inclusion in Nigeria. The findings reveal that people with at least a secondary education and unemployed people had higher levels of debit card ownership, higher levels of account ownership of any type, and higher levels of account ownership in a financial institution. Also, people with at least a secondary education had higher levels of borrowings from a bank or another type of financial institution, and had lower levels of savings at a financial institution. On the other hand, savings using a savings club or persons outside the family decreased among females, poor people and among people with a primary education or less. Furthermore, there were fewer credit card ownership by unemployed people while credit card ownership increased among employed people, the richest people and among people with at least a secondary education. Also, borrowings from family or friends decreased for most categories in 2014 and 2017. Finally, the econometric estimation shows that borrowings and savings outside financial institutions (using family, friends or saving clubs) significantly contributed to economic growth than borrowing and savings through financial institutions. The findings have implications.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial inclusion, access to finance, financial exclusion, development, economic growth, poverty reduction, Nigeria, digital finance, cashless policy, financial education, financial literacy, Africa, robo advisor, regulatory sandbox
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G20 - General; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

References

Adeola, O., & Evans, O. (2017). Financial inclusion, financial development, and economic diversification in Nigeria. The Journal of Developing Areas, 51(3), 1-15.

Babajide, A. A., Adegboye, F. B., & Omankhanlen, A. E. (2015). Financial inclusion and economic growth in Nigeria. International Journal of Economics and Financial Issues, 5(3), 629-637.

Bayero, M. A. (2015). Effects of Cashless Economy Policy on financial inclusion in Nigeria: An exploratory study. Procedia-Social and Behavioral Sciences, 172, 49-56.

Bruhn, M., & Love, I. (2014). The real impact of improved access to finance: Evidence from mexico. Journal of Finance, 69(3), 1347–1376.

David-West, O. (2016). The path to digital financial inclusion in Nigeria: Experiences of Firstmonie. Journal of Payments Strategy & Systems, 9(4), 256-273.

Demirgüç-Kunt, A., Klapper, L., Singer, D., & Van Oudheusden, P. (2015). The Global Findex Database 2014: Measuring Financial Inclusion around the World. World Bank Policy Research Working Paper 7255, (April), 1–88.

Efobi, U., Beecroft, I., & Osabuohien, E. (2014). Access to and use of bank services in Nigeria: Micro-econometric evidence. Review of development finance, 4(2), 104-114.

Kama, U., & Adigun, M. (2013). Financial Inclusion in Nigeria: The Journey so Far. Available at SSRN 2365209.

Mbutor, M. O., & Uba, I. A. (2013). The impact of financial inclusion on monetary policy in Nigeria. Journal of Economics and International Finance, 5(8), 318-326.

Nkwede, F. (2015). Financial inclusion and economic growth in Africa: Insight from Nigeria. European Journal of Business and Management, 7(35), 71-80.

Odior, E. S., & Banuso, F. B. (2012). Cashless banking in Nigeria: Challenges, benefits and policy implications. European Scientific Journal, 8(12).

Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329-340.

Ozili, P. K. (2020a). Financial inclusion research around the world: A review. Forum for Social Economics, 1-23).

Ozili, P. K. (2020b). Theories of Financial Inclusion. Available at SSRN 3526548.

Willis, L. E. (2008). Against financial-literacy education. Iowa L. Rev., 94, 197.